Administration of the capital market's structure and growth
1.1 BACKGROUND TO THE STUDY
The Nigerian capital market is the long-term end of the Nigerian financial system, just as the money market is the short-term end. In other words, the capital market performs for the economy, at the long-term end, the same duties that the money market does at the short-term end. Those who are short of finances and wish to borrow for the short term borrow from the money market, while those who are short of funds and wish to borrow for the long term borrow from the capital market.
Those who have funds in excess of their immediate needs and wish to lend or invest them for short-term periods do so on the money market, while those who wish to lend or invest them for long-term periods do so on the capital market.
The regulation of financial markets and the liberation of economies' capital flows in a number of African nations raises a number of difficult concerns. Policymakers and practitioners are involved and concerned about these concerns. A large array of concerns pertain to the establishment and layout of capital market operations (trading structures). This utilizes the capital market building concept, the function of the capital market (stock) market in attaining the overall financial objectives (auctions and dealership), and the linkages between innovative trading and global market rules.
1.2 STATEMENT OF THE STUDY
The Nigerian stock exchange has seen a significant revolution throughout the years. After around 38 years of existence, the Nigerian stock market has been around long enough to warrant a thorough examination of its structure and growth. The stock exchange has existed long enough to permit a thorough examination of its structure and growth. As soon as it becomes apparent that stocks and shares are readily available, the stock exchange or its institution is expected to provide the necessary mechanisms to facilitate the further offering of stocks and shares to the general public in the private sector of the economy and to encourage the investment of savings.
Nonetheless, the experience of most nations since the 1980s should have removed any doubts regarding the significance of domestic capital markets in guaranteeing balanced economic growth. The recurring difficulties of national and corporate debt have led to the folly of combining an excessive amount of short-term debt with an inadequate amount of long-term equity.
As envisioned at the time of its inception, the Nigerian capital market has not been as “smooth” as expected. In this industry, there are some limitations. A portion of the economy believes that Nigeria's capital market is underdeveloped and has not experienced significant expansion since independence. And the fact that shares are infrequently traded and prices do not represent the trading characteristics of listed companies.
Also, it is considered that the Nigerian capital market has “too many” responsibilities, preventing it from developing its market structure properly and efficiently.
1.3 OBJECTIVES OF THE RESEARCH
The purpose of this study is to examine the structure and growth of the Nigerian capital market. It examines the activities of the capital market, the major players on the Nigerian capital market, and the structure of the capital market as it relates to the economic growth of Nigeria.
In light of this, the operations of the capital market, the necessity for stock exchange, and the Nigerian capital make-up and capital structure and development are analyzed in depth.
1.4 IMPORTANCE OF THE STUDY
This study will educate and expose uninformed businessmen and students to the operations of the NSE, thereby broadening the knowledge base of the general public, particularly the operations and policymakers of the capital market. Recommendations will in no small measure serve as a guide for improved performance.
1.5 STATEMENT OF HYPOTHESIS
A hypothesis is a declaration of conjecture about the relationship between two or more variables. They are usually declarative sentences, and they relate to variables either generally or specifically.
Therefore, the following flawed and alternative hypothesis could help us to a more objective and reasonable conclusion:
The Nigerian Stock Exchange has not played a substantial influence in the growth of the Nigerian economy.
Hi: The NSE has played a crucial part in the economic development of Nigeria.
1.6 SCOPE OF EXAMINATION
As a case study, this project is limited to the Nigerian stock exchange in Lagos. And encompassed the years 2005 through 2007.
1.7 DEFINITION OF TERMS
NSE – Nigeria stock exchange
The Securities and Exchange Commission
The claims of holders of specialized property are secured by these printed financial documents. They could be stocks, shares, bonds, or debentures that are exchanged on a stock exchange.
A market structured for the trading of securities.
share HOLDING – Shares owned by a particular payer.
ISSUING HOUSE – This is a member of the trading community that assists in the preparation of prospectuses for the sale of new securities presented to the public by a firm or government.
EQUITY – Ordinary shares of a company that represent a residual ownership interest in the firm's assets.
A PART OF A COMPANY'S PROFITS THAT IS DISTRIBUTED TO SHAREHOLDERS.
A document that acknowledges your obligation.
JOBBERS – Those who help map out all surplus stock and release it to the market as demand permits.
A corporation or individual that purchases and sells assets on behalf of investors in exchange for a commission is referred to as a stock broker.
INVESTORS – Individuals or institutions who purchase securities through the use of savings or debt.
This term refers to the commission that stock brokers charge for services delivered.
RIGHT ISSUE – these are funds obtained by issuing shares for cash to ordinary shareholders in proportion to their existing holdings, unless shareholders at a general meeting have agreed differently.
PRICE EARNING: This is the current market price of a share of dividend ratio (PIE) divided by the company's earnings per share. This ratio reveals investor confidence in the stock as well as the stock's payback period.
BONUS SHARES SCRIPT – These are new shares made fully paid by the capitalization of reserves and allocated to ordinary shareholders in proportion to their current holdings.
NSEC stands for Nigeria Stock Exchange Commission.
IPOs – The valuation of securities
BOND – A security with a nominal value that entitles the holder to interest payments at regular intervals from the issuer until the bond is redeemed.
The individual who possesses a bond.
Capital Market – The market for the supply of capital to businesses.
ECONOMIC DEVELOPMENT — This is a consistent improvement in material well-being that may be represented in an expanding flow of products and services.
OFFER FOR SALE – A public offering of shares of a firm made by an issuing house and in which the shares being sold are not new shares, but rather shares that have been sold by existing shareholders.
Administration of the capital market's structure and growth